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Celebrating the highs and lows

It is the time of year for reflection and resolutions. We look back on the ups and downs of the year that is about to end and look forward to the New Year with hope, promises and predictions. As for 2015 here at the DDL Blog – we hope we will continue to be helpful and informative to our readers, we promise that Bexis will find at least one decision a quarter worthy of a full-blown tirade, and we predict that McConnell will keep us up-to-date on both legal trends and what’s hot on TV and at the movies.

As for 2014, Bexis is posting his annual Best Of and Worst Of lists. Keeping with that theme, we decided to post about a case that has some of both, the good and the bad. The case is Brown v. Johnson & Johnson, 2014 U.S. Dist. LEXIS 173800 (E.D. Pa. Dec. 9, 2014) and it involves the over-the-counter drug Children’s Motrin. Wanting to end on a high note, we’ll dispense with the low points of the decision first.

First up, the preemption rulings. The court held that plaintiff’s failure to warn claim was not preempted because the defendant had not shown that it could not have used the CBE process to change the warning label. Establishing warning preemption in a drug case is an “exacting burden” for defendants requiring clear and convincing evidence that the FDA would have rejected the warning proposed by plaintiff. Id. at *2-3. The court applied the same “exacting burden” to defendant’s design-related preemption defense, finding a lack of evidence that the FDA would have rejected a proposed design change as well. Id. at *6.

On design defect, defendant argued that plaintiff had not produced evidence of a feasible, safer alternative. The court agreed with defendant to the extent that plaintiff was relying on acetaminophen as an alternative to the active ingredient in Children’s Motrin, which is ibuprofen. Acetaminophen is an entirely different product and a different product cannot serve as an alternative design. Id. at *7-8. A little good hidden among the bad. Plaintiff, however, also pointed to dexibuprofen as a safer alternative, which the court concluded was a “different form” of ibuprofen and therefore could serve as a possible alternative design. Id. at *8. But, was dexibuprofen feasible? Defendant produced evidence that the FDA rejected its application to market dexibuprofen in the U.S. The court, however, was swayed by plaintiff’s argument that “the FDA might have granted a second application if Defendants had presented more research.” Id. at *8 (emphasis added). Compare that rather undemanding standard to the “exacting burden” placed on defendants’ preemption defense. We see a striking double standard. Defendant couldn’t demonstrate that FDA would have rejected a labeling or design change, so no preemption. Defendant can demonstrate that the FDA rejected dexibuprofen, but maybe if they asked again the FDA would have change its mind, so plaintiff meets her burden on design defect. If, might, and maybe doesn’t sound like a solid standard to us.

Finally on the negative side are the court’s punitive damages rulings. First the court had to decide which state’s law applied: Florida, where plaintiff resides and where the alleged injury occurred; New Jersey, where defendant resides and has its principal place of business; or Pennsylvania, where defendant conducts business including the manufacture of Children’s Motrin. The court ruled out Florida because it bore no relationship to defendant and “had no material interest in protecting” defendant. Id. at *11. Given that rationale, it would seem to us that the court should have concluded that New Jersey law should apply to punitive damages – defendant’s home state and therefore the state with the greatest interest in protecting defendant. It is also the state, among these three, with the most defense-friendly punitive damages law. See N.J. Stat. Ann. § 2A:58C-5 (banning punitive damages in products liability actions where the FDA has approved the product). Somehow, the court instead concluded that Pennsylvania’s interest trumped New Jersey’s. Id. at *11-12. This seems almost entirely based on the fact that the defendant manufactures the product in Pennsylvania (that is the only thing that makes Pennsylvania different from any other state in which defendant markets and sells its product). But plaintiff’s punitive damages claims aren’t based on manufacturing practices. Maybe if they were we would find the court’s decision somewhat more understandable. Rather, plaintiff alleges that she is entitled to punitive damages based on defendant’s failure to warn and failure to market a safer alternative. Certainly labeling, warning, marketing, and design decisions weren’t made at a manufacturing plant in Pennsylvania. We simply can’t wrap our heads around this one. And based on the choice of law ruling, it is hardly surprising that the court denied defendant’s motion for summary judgment on punitive damages. Id. at *13.

Now moving on to the more positive aspects of the decision. Plaintiffs attempted to make a failure to warn physicians claim. “Defendants had no duty to inform physicians, however, because Children's Motrin is an over-the-counter drug.” Id. at *4. Summary judgment granted. Plaintiffs were also unsuccessful on their misrepresentation by omission claim. To maintain a claim for misrepresentation by concealment (or by silence), plaintiff must show that the defendant owed plaintiff a fiduciary duty to disclose the omitted fact. Id. at *14-15. The court concluded that the relationship between a drug company and consumers is not fiduciary and therefore, plaintiff, having no evidence of affirmative misstatements, did not meet her burden on her misrepresentation by concealment claim.

Plaintiff brought a claim under the Pennsylvania’s consumer protection law, but to maintain that claim plaintiff needed to demonstrate a “sufficient nexus” between herself and Pennsylvania. Here, the manufacture of the product in Pennsylvania wasn’t enough. Because plaintiff was neither a resident of nor a consumer engaged in transactions in the state, the court granted summary judgment. Id. at *15.

Finally, Children’s Motrin is manufactured and marketed by defendant McNeill but plaintiff sought to hold McNeill’s parent corporation Johnson & Johnson liable as well. To do this, plaintiff would have had to produce evidence to pierce the corporate veil – evidence that the corporate form was used to perpetuate a wrongdoing or that the parent company exhibited more than a high degree of control over the subsidiary. Id. at *15-16. In this case, plaintiff could only point to instances where references were made by Congress to J&J and McNeill interchangeably and to an organizational structure whereby J&J subsidiaries reported to J&J quality control officers. Id. at *16-17. Neither was sufficient proof to allow the extreme measure of piercing the corporate veil and therefore J&J was granted summary judgment.

Much like any year, this case has its highs and lows. Here’s hoping you are celebrating more highs than lows this year and next. Happy New Year!